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What is a "trustee"?

The trustee in a bankruptcy case is the representative of the estate.

In chapter 12 or 13 cases, the appointed trustee receives the payments from the debtor and disburses those funds to the debtor’s creditors according to the debtor’s plan which has been approved by the court.

In a chapter 7 case, the appointed trustee examines the debtor at the § 341(a) Meeting of Creditors in an effort to locate and take charge of the debtor’s nonexempt assets, if there are any. The trustee will then take whatever steps are necessary to reduce those assets to cash. Since there generally is not enough money to pay all the creditors in full, the trustee, under the supervision of the office of the US Trustee, disburses the funds according to the priorities set out in 11 USC § 507.

To be eligible to serve as a trustee, the individual or corporation must be competent to perform the duties of trustee and, in chapter 7, 12, or 13, must reside or have an office in the judicial district or adjacent to the district in which the case is pending. The trustee must also maintain an insurance bond which guarantees faithful performance of the trustee’s official duties.

Promptly after a case is filed with the court, the United States Trustee appoints a disinterested person who is a member of the panel of trustees established pursuant to 28 USC § 586.